Green Home Building Continues to Climb, Valued at $36 Billion in 2013 and Expected to More than Double by 2016-Says New McGraw Hill Construction Study
Key to the growth of green as the economy has improved is the increased incorporation of green principles into building codes, ordinances and regulations.
McGraw Hill Construction, a part of McGraw Hill Financial (NYSE: MHFI), today released findings from a new Green Home Builders and Remodelers Study at the National Association of Home Builders(NAHB) International Builders' Show in Las Vegas. Green homes comprised 23% of the overall residential construction market in 2013 and are expected to grow to between 26% and 33% of the market by 2016. This equates to a doubling in the value of green home construction over three years, growing from $36 billion in 2013 to $83–$105 billion in 2016, based on the current McGraw Hill Construction forecast for total residential construction.
According to McGraw Hill Construction research dating back to 2006, the green home building market most rapidly accelerated during the housing downturn when builders experienced in green remained in business at higher proportions than those not knowledgeable about energy-efficient and green home building. As the residential market improves, indications are that the residential market is becoming bifurcated, with green builders accelerating the depth of their green work, and new or returned entrants into the market focusing on traditional construction practices.
"Green experience was a significant part of what kept builders in business during the recession," said Harvey M. Bernstein, VP of Industry Insights and Alliances, McGraw Hill Construction, "and now, those same firms are embracing the competitive advantage they earned by deepening their delivery of energy-efficient and green homes. We also see firms reentering the market that are using traditional home building practices versus green practices because that's what they know. However, the broader availability of green building products and practices, a more educated consumer and an increase in activity at the regulatory level will also encourage this group of builders to learn green practices over time."
The study shows that the top drivers to increased green home building activity include changes in codes and regulations, better quality, wider availability and affordability of green products, energy costs, and competitive advantage.
The green home building study, produced by McGraw Hill Construction in conjunction with the NAHB, is the fourth in a series that dates back to 2006. It was designed to provide key insights into market opportunities, backed by proprietary research surveys and the power of the Dodge database.
The study reveals business benefits afforded by green building:
Competitive marketing advantage: 51% of builders and remodelers find that it is easier to market green homes, up from 46% in 2012 and 40% in 2008.
Customer willingness to pay for green features:
68% of builders (up from 61% in 2011) report their customers will pay more for green, with 23% reporting that their customer will pay more than 5%
84% of remodelers report the same (up from 66% in 2011), with 55% reporting their customers will pay more than 5% for green features.
"This study shows that more and more builders are incorporating environmentally sensitive and energy and resource efficient techniques into traditional home building practices, and we expect to see even stronger growth in the coming years," said Matt Belcher Co-Chair of NAHB's Energy & Green Building Subcommittee and a Builder from Wildwood, MO. "Green building expertise provided builders and remodelers with a competitive advantage during the housing downturn, and now as the market continues to recover, NAHB members stand ready to meet the increased demand."
In 2013, 16% of builders were dedicated to green building with more than 90% of their projects green, and another 20% were highly invested in green activity with 61% to 90% of their projects green. By 2015, that is expected to increase, with 20% of builders expecting to be exclusively working on green buildings, and 24% doing 61% to 90% green work. Remodelers are also increasing their attention to green work, with 16% reporting more than 60% of their projects are green today, expected to grow to 23% doing this amount of green remodeling in 2015 and 32% by 2018.
This spring McGraw Hill Construction will publish its 4th SmartMarket Report on the green home building marketplace, which will include these findings with additional analysis and new market research data on the trends of the multifamily builder. In the meantime, key findings from the study can be found at analyticsstore.construction.com/GreenHomeKeyFindings14.
The National Association of Home Builders is a Washington-based trade association representing more than 140,000 members involved in home building, remodeling, multifamily construction, property management, subcontracting, design, housing finance, building product manufacturing and other aspects of residential and light commercial construction. NAHB is affiliated with 800 state and local home builders associations around the country. NAHB's builder members will construct about 80 percent of the new housing units projected for this year.
About McGraw Hill Construction: McGraw Hill Construction provides essential data, news, insights, and intelligence to better inform construction professionals' decisions and strengthen their market position. McGraw Hill Construction's data, analytics, and media businesses – Dodge, Sweets, Architectural Record, and Engineering News-Record – create opportunities for owners, architects, engineers, contractors, building product manufacturers, and distributors to strengthen their market position, size their markets, prioritize prospects, and target and build relationships that will win more business. McGraw Hill Construction serves more than one million customers through its trends and forecasts, industry news, and leading platform of construction data, benchmarks, and analytics, including Dodge MarketShare™, Dodge BuildShare® and Dodge SpecShare®. Construction data is available for North American and global markets. To learn more, visit http://www.construction.com.
About McGraw Hill Financial: McGraw Hill Financial (NYSE: MHFI), a financial intelligence company, is a leader in credit ratings, benchmarks and analytics for the global capital and commodity markets. Iconic brands include: Standard & Poor's Ratings Services, S&P Capital IQ, S&P Dow Jones Indices, Platts, CRISIL, J.D. Power, and McGraw Hill Construction. The Company has approximately 17,000 employees in 27 countries. Additional information is available at www.mhfi.com.
Media Contacts: Kathy Malangone, Senior Director, Marketing Communications, McGraw Hill Construction, +1 212-904-4376, firstname.lastname@example.org
SOURCE: McGraw Hill Construction
Going green is a matter of survival - Ms Mili Majumdar, Director - Sustainable Habitat, TERI
Giving the green signal to construction projects is a cumbersome process, but it can be made faster through GRIHA (Green Rating for Integrated Habitat Assessment), which offers pre-certification that is recognised by the environment ministry
Transparency, accountability and corruption- free transactions dominate political and social agenda in present times. The newly introduced real estate bill also attempts to protect consumer rights, and strengthen the debate around the need to disclose correct information on delivery time, areas sold and so on. The real estate sector has been the centre point of several debates and controversies.
There is a constant tussle between balancing the environment and development agenda, while meeting consumer needs and aspirations. Environment clearance of construction projects is a sore point that every developer and builder laments about. A builder/developer is expected to ensure that every resident has sustainable source of drinking water, has access to electricity and safe and healthy living. Often these needs may be compromised by sheer choice of location that may have little or no supply of water, may have remote access to basic infrastructure provision or may have erratic and unreliable power supply.
Green/environmental consideration is a matter of survival and there should be no choice but to adhere to the measures that promise sustainable and healthy living in our homes. The process, however may be made faster, transparent and more objectively assessable. GRIHA offers precertification that is recognised by the ministry of environment and forests at the centre and state level for faster clearance of projects. This is what GRIHA does:
GRIHA (www.grihaindia.org) is an indigenous rating system for design, evaluation and rating of green buildings in India. It has been endorsed by the government of India and is increasingly being adopted as an instrument for incentivising greener and cleaner habitats. Its 100-point rating system spread over 34 criteria addresses environmental, energy, social and health issues that are essential for a good building/habitat. It is important to understand that green is good and not a burden. Provision for sustainable and clean water for daily needs is good for us and requires planning to ensure that.
In addition to ensuring reliable source, avoiding wastage and ensuring its prudent use by putting in low flow fixtures and fittings, or using lesser water to maintain greenery around our buildings helps us in the long run. Rainwater harvesting and waste water treatment systems need utmost attention and careful detailing. Planning and installation should be followed through by efficient and lifelong maintenance. It is in fact detrimental if these systems are not maintained. It is often observed that rainwater harvesting pits breed mosquitoes and insects if not cleaned and maintained. It is much better not to put in a system than not maintaining it after installation.
Sewage treatment plants and effluent treatment plants need maintenance and it is important t o work out an appropriate system for financing its maintenance and upkeep through its life. Every system that operates on mechanical and electrical parts need maintenance. Systems the are heart and soul of buildings. We have to maintain systems for air-conditioning, water treatment, waste water treatment, rainwater harvesting to ensure their proper functioning over the years. Realising the need to ensure transparency and performance, GRIHA embeds a performance based rating that not only meets the rating requirements, but ensures seamless integration with environmental regulations.
For example, meeting GRIHA requirements would naturally fulfill requirements of environmental clearance (EC) and other codes and standards such as the Energy Conservation Building Code of India or the National Building code of India. GRIHA precertification thus, looks into requirement of EC and pre-certifies a project based on requirements of EC and GRIHA rating.
However, one needs to understand the difference between rating and EC. There is fundamentally a difference between green rating and environmental clearance. While the former is a voluntary system, the latter is a mandatory requirement. Typically, rating systems have provisions of voluntary and graded performance requirement.
To cite an example, green rating may exempt a project from not putting in a waste water treatment system and thus sacrificing the points assigned to it in the framework of the rating system. However, provision of waste water treatment is a mandatory requirement as per environmental clearance (for projects that need EC). GRIHA pre-certification that is linked to EC, ensures checks and balances with respect to requirements of EC. All criteria that are mandatorily required to be fulfilled as per EC are reviewed and considered while pre-certifying a project as per GRIHA.
Thus, GRIHA pre-certification helps the developer to face the EC committee in a more prepared way. Further to the process, site compliance is crucial to future performance of any system. Often several crucial issues are overlooked during the construction process.
Take the example of overdeck roof insulation. Roof insulation is done as a measure to reduce heat gains through the roof. The key to effective insulation is its proper laying and installation and water proofing. Insulation may easily lose its property if water seeps through it . Puncturing an insulated roof shall destroy all its insulating property. Thus, proper commissioning and maintenance is crucial if you really intend to benefit from any green measure.
Often we blame solar water heating systems for not functioning properly. Panels need to be cleaned regularly and piping systems need proper insulation and maintenance if we want it to function properly.
GRIHA rating system is a performance-based green building rating system that attempts to provide a comprehensive approach towards achieving best performance from green measures. It addresses our country specific environmental issues in a pragmatic and doable manner. Due diligence and transparency in process is the backbone of the system.
The rating is backed by facilitation support offered by trained professionals who have extensive experience in design and operating green buildings. Green rating should not be perceived as an additional layer of services being rendered for a building. Rather it is a complementing process that facilitates an integrated design that results in a good and functional building that delivers its function, ensures environmental sustainability, is energy and water efficient and saves cost over its life cycle.
Environment clearance and compliance also gives similar results and should be perceived and followed in true spirit of the intent, rather than being perceived as a hurdle in the development process.
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